Despite Improving Market Conditions, Millennials Still Face Barriers to Homeownership
Ninety-seven percent of millennial (born between 1981 and 1996) home buyers say financial barriers stand between them and their dreams of homeownership, according to a new survey from Clever Real Estate.
Most Commonly Cited Barriers
The company's report of the survey results reveals the barriers most often cited:
- Homes are too expensive (46%)
- Interest rates are too high (40%)
- Saving for a down payment (34%)
- High property taxes (30%)
- A lack of available homes in their budget (25%)
- Qualifying for a mortgage (21%)
- A lack of income (20%)
Many older folk still think of millennials as mere youngsters. But it's worth remembering that the youngest of that generation will turn 30 this year, while the oldest are 45 years old.
Those are prime first-time buyer years, and, understandably, many millennials are feeling frustrated as they see themselves shut out of the housing market.
Are the Biggest Barriers Crumbling?
Home prices are moderating. The median sales price for a home in the U.S. peaked at $442,600 in the fourth quarter of 2022, according to the Federal Reserve Bank of St. Louis. By the second quarter of 2025 (the most recent figure available), that price is down to $410,800.
However, the median price stood at $317,100 as recently as the second quarter of 2020, and that was followed by the steepest sustained rise in home prices since at least 1963, which is as far back as the Fed's data go. So, millennials still don't have an easy time with home prices.
Most millennials (59%) plan to spend less than $400,000, according to the Clever survey.
Still, there's some good news concerning mortgage rates. On the day this was written, they stood just above the 6% mark for a 30-year fixed-rate loan. And it wouldn't be a bit surprising if they dipped into the 5% range. However, how long that might last is anyone's guess.
Just over half (51%) of millennials surveyed said they "would only consider purchasing if rates fall below the current level of about 6%," according to Clever's report.
So, objectively, the barriers to homeownership that millennials care about most are crumbling. But it may not feel that way to them. Those whose dreams formed when mortgage rates were below 3%, and median home prices were nearly $100,000 lower than today, may still feel cheated.
New Student Loan Rules May Impact Prospective Buyers
Roughly 18.5 million millennials still carried student debt in 2024, according to the Education Data Initiative. And the government has been re-engineering federal student loans to collect more money.
"On Jan. 7, the [U.S. Department of Education] began issuing notices to borrowers in default. They will have 30 days to set up a payment plan before the federal government seizes up to 15% of their income until the debt is paid in full," reports The Sacramento Observer.
In particular, many millennials may have enrolled in the SAVE plan, which was highly flexible. The 7 million borrowers in that plan must now enroll in other plans, which are likely to require higher payments.
"People who made other financial decisions based on what they thought their payment was gonna be on the SAVE plan – they're in trouble," Betsy Mayotte, founder of the Institute of Student Loan Advisors (TISLA), told NPR in December. "A payment plan ... has never been pulled out from existing borrowers."
For many millennials with student debt, this reworking of the system could set their homeownership plans back years.
